Indians in Singapore Lured to Property Back Home by Rupee's Drop ...

Feb. 9 (Bloomberg) ? Vivek Sharma, like many Indians who came to Singapore for work, failed to jump into the island state?s booming property market before the government imposed taxes to deter foreign buyers.

Now, he is joining thousands of his compatriots who are taking advantage of the drop in the rupee to a record low in December and seeking to buy property back home ? for rental investments, homes for left-behind family members, retirement properties and residences for their own eventual returns.

?I missed the opportunity to buy property in Singapore when I moved here 2 1/2 years back,? said Sharma, 38, a medical-device manufacturing executive who was among 3,300 attendees at a two-day home fair in January where 53 Indian developers were showcasing their properties and discounting them to boost sales. ?Now, prices have risen a lot, and with the new taxes, it makes better sense to invest back home.?

India?s property market may attract $3 billion from overseas buyers this year, almost double last year?s $1.6 billion, Shobhit Agarwal, joint managing director at the Indian unit of Jones Lang LaSalle Inc., the world?s second-biggest, publicly traded commercial-property broker, said in an interview in Mumbai in December. About one-third typically comes from individuals like Sharma and two-thirds from investors, he said.

Housing Development Finance Corp., India?s largest mortgage lender and the organizer of the annual Singapore home fair, said the number of developers participating rose 26 percent over last year, while there were 27 percent more attendees. Among those taking part were DLF Ltd., Unitech Ltd. and Emaar MGF Land Ltd. HDFC conducts similar fairs in Kuwait, Dubai ? where the next is scheduled for April ? and in London.

Sales Declines

The volume of property sales has declined in India?s biggest cities, including Mumbai, New Delhi, Hyderabad and Bangalore, after the nation?s central bank raised borrowing costs by a record 375 basis points since March 2010. The bank is seeking to curb inflation, although property prices remain at or close to record highs.

At the same time, the rupee fell 16 percent against the U.S. dollar in 2011, the worst performer among Asian currencies. The currency has since recouped some of its losses, climbing 7.7 percent to 49.45 to the U.S. dollar last month. It is expected to fall again to 52 in the quarter ending in March, according to the median estimate in a Bloomberg survey.

Agarwal at Jones Lang LaSalle said India?s property prices may decline 10 percent this year, and that with a potential 20 percent loss in the currency, property purchases will become even more attractive to overseas Indians.

?They get a net 30 percent discount, so they will be ready to write the check,? Agarwal said.

Cutting Prices

In Mumbai, where Sharma hopes to buy property as an investment and ultimately for retirement, residential home sales dropped 17 percent to a three-year low in the final quarter of last year compared with the previous quarter, according to Mumbai-based Liases Foras Real Estate Rating Research Pvt. The dismal sales will spur developers to cut prices to boost volumes, Pankaj Kapoor, founder of Liases Foras, said.

In Singapore?s prime districts such as Orchard Road, a typical three-bedroom apartment would sell for about $2,000 a square foot, or around $4 million. A similar-sized apartment in Mumbai?s posh Malabar Hill would sell for about 25 percent less. Home prices in Singapore soared 55 percent from June 2009 through December 2011, while in Mumbai they nearly doubled in the same period.

Once-in-Lifetime

Article source: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2012/02/08/bloomberg_articlesLYQZ8N07SXKX01-LZ2SO.DTL

Source: http://www.indianpropertyagent.com/indians-in-singapore-lured-to-property-back-home-by-rupees-drop/

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